![[NEWS] China cracks down on underground bank involved in illegal cryptocurrency transactions worth over 45 billion yen](/_next/image?url=https%3A%2F%2Fimages.microcms-assets.io%2Fassets%2F7819a9cf917e4bcd862bfa2ff5f14d24%2Fee3136f8092945bb9b0cf3cc1f6d1da3%2Fchina_1172524921.jpg&w=3840&q=75)
It has been revealed that the Public Security Bureau in Pan City, Jilin Province, China, has uncovered an illegal underground bank. Six people have been arrested on suspicion of using cryptocurrency to transfer 2.14 billion yuan (approximately 45.7 billion yen), local media reported.
According to reports, the suspects used cryptocurrency's anonymity, decentralization, and excellent international remittance characteristics to illegally exchange Chinese yuan for South Korean won.
The Public Security Bureau's Economic Investigation Team explained that suspects Jin Mudong and Shen Mo, who live in Jilin Province, defrauded others of their funds while conducting a currency exchange business in South Korea and China, and then fled the country.
Based on multiple clues, the Public Security Bureau pointed out that transactions were frequently made from the suspects' bank accounts, and that there were a large number of trading partners. These are said to be characteristics of criminal activities seen in underground banks.
Mudong and his group used domestic accounts to illegally receive and transfer funds, conduct OTC cryptocurrency transactions, and exchange South Korean won. The Public Security Bureau identified the group's organizational structure, which appears to have led to the arrest of the remaining four.
In January of this year, the Supreme People's Procuratorate of China issued the "Opinions on Maximizing the Use of Procuratorate Functions to Realize and Guarantee High-Quality Financial Development in Accordance with the Law," once again pointing out that fundraising using crypto assets is illegal and should be severely punished.
In addition, the State Administration of Foreign Exchange of China also pointed out in December last year that "crypto assets are illegal foreign exchange trading tools." It formulated the "Measures for the Management of the Development of Foreign Exchange Business of Banks" and put it into effect on January 1, 2024.
The People's Procuratorate and the State Administration of Foreign Exchange also issued a joint statement, announcing eight cases of foreign exchange-related crimes and mentioning that the act of exchanging crypto assets such as Tether (USDT) for RMB is illegal.
Currently, illegal foreign exchange crimes through crypto asset transactions are on the rise. The Supreme People's Procuratorate emphasized that it will strengthen cooperation between the administration and criminal law and crack down on illegal cross-border financial activities in accordance with the law. In some cases, capital punishment may be possible.
Reference: Report
Image: Shutterstock
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